Other things the same, if the government increases transfer payments to households, then the effect of this on the government's budget
a. will make investment rise.
b. will make the rate of interest rise.
c. will make public saving rise.
d. All of the above are correct.
b
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When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect
Indicate whether the statement is true or false
Monopolistic competition is characterized by
a. one firm selling several products. b. many firms selling the same product. c. many firms selling slightly different products. d. one firm selling one product.
The present value of $120 to be received one year from now
A. is $121. B. is $100. C. is $120. D. depends on the rate of discount.
If coffee and tea are substitutes and the supply of coffee increases, all of the following will result except
A. the price of coffee will fall. B. the price of tea will fall. C. the quantity of coffee purchased will rise. D. the quantity of tea purchased will rise.